Item 1A. Risk Factors
Investing in our ordinary shares involves uncertainty and risk due to a variety of factors. You should carefully consider the risks
described below, which could have a material adverse effect on our business, financial condition, reputation, results of operations
(including revenues and profitability) and/or ordinary share price, with all of the other information included in this Annual Report on
Form 10-K . The Company may not be able to accurately predict, control or mitigate these risks. Statements in this section are based on
the Company’s beliefs and opinions regarding matters that could materially adversely affect the Company in the future and are not
representations as to whether such matters have or have not occurred previously. The risks and uncertainties described below are not
exhaustive and should not be considered a complete statement of all potential risks or uncertainties that the Company faces or may
face in the future.
Risk Factors Summary
The following summary is intended to enhance the readability and accessibility of our risk factor disclosures. We encourage you to
carefully review the full risk factors discussed below in their entirety for additional information. Some of the factors that could
adversely affect our results of operations, cash flows and financial condition, and the trading price of our ordinary shares, include:
Market and Industry Risks
• As a leading global manufacturing business, we have been, and may be materially adversely affected by economic,
geopolitical and social factors that are beyond our control.
• We may be adversely affected by uncertainty, downturns, actions taken by competitors or other changes in the paper and
packaging industry.
• Our earnings are highly dependent on demand.
• Price fluctuations in, or shortages in the availability of, energy, transportation and raw materials could materially adversely
affect our business.
• We are exposed to significant competition in the paper and packaging industry, which may materially and adversely affect
the price and volume of products sold.
Operating Risks
• We may experience business disruptions that adversely affect our operations.
• We may fail to anticipate trends and develop or integrate new technologies or to protect intellectual property related to our
products and technologies.
• Our capital expenditures may not achieve the desired outcomes or may be completed at a higher cost than anticipated.
• We are exposed to risks related to international sales and operations.
• We could be exposed to currency exchange rate fluctuation risks.
• We may produce faulty or contaminated products due to failures in quality control measures.
• We are subject to cybersecurity risks that could threaten the confidentiality, integrity and availability of data in our systems,
and could result in disruptions to our operations .
• We may be adversely impacted by work stoppages and other labor relations matters.
• We may not be able to attract, motivate and/or retain qualified personnel, including our key personnel.
• We face challenges associated with sustainability matters, including the impact of climate change and its potential impact on
areas such as our operations and raw material availability.
• Failure by us to successfully implement strategic transformation initiatives, including those relating to information
technology infrastructure, or to achieve our mid-range or long-range targets and goals could adversely affect our business and
share price.
• If we are unsuccessful in integrating acquisitions or if disposals result in unexpected costs or liabilities, our business could be
materially and adversely affected.
• We face risks related to the Combin ation.
Financial Risks
• Our growth depends on our ability to retain existing customers and attract new customers.
• Our debt could adversely affect our financial health and operating flexibility.
• Adverse credit and financial market events and conditions, as well as credit rating downgrades, could, among other things,
impede access to or increase the cost of financing.
• We have a significant amount of goodwill and other intangible assets and a write-down could materially adversely impact our
operating results.
• We have a number of pension arrangements that are currently in deficit and may require increased funding due to statutory
requirements .
• Our decision or ability to pay dividends in respect of our shares or conduct share repurchases is subject to a number of
factors, and there are no guarantees that the Company will pay dividends or maintain or increase the level of any such
dividends or that the Company will conduct share repurchases.
• Changes in existing financial accounting standards or practices may have a material adverse effect on our business, results of
operations, cash flows and financial condition, and the trading price of our ordinary shares.
Legal and Regulatory Risks
• We are subject to a wide variety of laws, regulations and other requirements that may change or may impose substantial
compliance costs.
• We are subject to a growing number of environmental and climate change laws and regulations that impose compliance
obligations and costs, and failure to comply with these laws may have a material adverse effect on our business.
• Changes to trade policy, including tariff and customs regulations, or failure to comply with such regulations may have an
adverse effect on our reputation, business, financial condition and results of operations.
• We are subject to compliance with competition and antitrust laws and regulations in the jurisdictions in which we operate
and, from time to time, may be subject to investigations or proceedings with respect to allegations of unfair competitive
practices and similar behavior.
• We are subject to a number of laws and regulations relating to privacy, security and data protection, and failure to comply
could lead to fines and/or litigation.
• Failure to comply with applicable occupational health and safety laws and regulations may have a material adverse effect on
our business.
• The Company’s maintenance of two exchange listings may adversely affect liquidity in the market for our shares and result in
pricing differentials of our shares between the two exchanges.
• We are required to comply with the Sarbanes-Oxley Act, and we may continue to incur significant costs and devote
substantial management time towards maintaining and improving our internal controls, which may materially adversely affect
our operating results in the future .
Risks Related to Our Incorporation in Ireland
• We are incorporated in Ireland and Irish law differs from the laws in effect in the U.S. and might afford less protection to our
shareholders.
• Any attempts to acquire the Company will be subject to the Irish Takeover Panel Act 1997, Takeover Rules, 2022 (the “Irish
Takeover Rules”) and subject to the supervisory jurisdiction of the Irish Takeover Panel and the Company’s board of
directors (the “Board”) may be limited by the Irish Takeover Rules in its ability to defend an unsolicited takeover attempt.
Market and Industry Risks
As a leading global manufacturing business, we have been, and may be in the future, materially adversely affected by factors that
are beyond our control, such as economic and financial market conditions, geopolitical conflicts and other social and political
unrest or change.
Our industry has been, and may be, adversely affected by a number of factors that are beyond our control, including, but not limited
• macroeconomic and business conditions, including deteriorating or volatile macroeconomic conditions and related supply and
demand dynamics, as well as inflation and deflation;
• geopolitical conflicts and other social and political unrest or change;
• sustainability, environmental regulations and trade policies and agreements;
• conditions in the financial markets, including counterparty risk, insurance carrier risk, rising interest rates, rising commodity
prices, and currency exchange rate fluctuations, which may impact price and demand for our products and the costs to finance
and operate our business;
• financial and economic uncertainties in our major international markets;
• government deficit reduction and other austerity measures in specific countries or regions, including protectionist measures
that limit international trade, could have a negative impact on manufacturing and production levels of businesses and
customers in the markets in which we operate ; and
• cyber incidents and related threats to the confidentiality, integrity and availability of data in systems.
We are unable to predict the timing or rate at which economic conditions in our markets may change and the impact of such changes.
For example, if the economic climate were to experience a deterioration as a result of geopolitical events (such as an escalation in
existing wars or conflicts or the initiation of additional conflicts or hostilities), trade tensions (including the implementation of tariffs
on U.S. imports by the current U.S. Administration and potential retaliatory tariffs) and/or a pandemic, it could result in an economic
slowdown which, if sustained over any significant length of time, could have a material adverse effect on our business, results of
operations, cash flows and financial condition, and the trading price of our ordinary shares. In addition, changes in trade policies,
including renegotiating, or potentially terminating, existing bilateral or multilateral agreements, as well as the imposition of tariffs,
could impact demand for our products and the costs associated with operating our business, including certain of our capital
investments.
We experienced cost inflation across our business in fiscal 2023, 2024 and 2025, albeit at moderating levels since fiscal 2022.
Persistent inflation results in higher manufacturing and transportation costs, which we may not be able to recover through higher
prices charged to our customers.
Unanticipated events such as global conflicts, public health crises, extraordinary weather events, labor disputes or strikes, and cyber
incidents may cause instability in global financial and foreign exchange markets. This instability could lead to volatility in the value of
our operating and functional currencies and hinder the availability of financing from our current lenders.
Our results of operations, cash flows and financial condition, and the trading price of our ordinary shares could be further adversely
affected, perhaps materially, by any of these matters.
We may be adversely affected by uncertainty, downturns, actions taken by competitors (such as the addition of new capacity) or
other changes in the paper and packaging industry; in addition, the cyclical nature of the paper and packaging industry could
result in overcapacity and depress prices for our products.
We are highly dependent on the market dynamics of the paper and packaging industry. We could therefore be materially adversely
affected by negative developments, uncertainty, downturns and changes in the paper and packaging industry as a whole or in part, as
well as by the addition of new capacity by our competitors. A lack of investor confidence in the paper and packaging industry could
also have an adverse effect on the trading price of our ordinary shares.
Our operating results are impacted by the paper and packaging industry’s historical cyclical investment pattern. This cyclicality arises,
in part, from the capital intensity of facilities such as paper mills (which generally continue production as long as paper prices are
sufficient to cover their marginal costs), the lead time between the planning and completion of a new mill and the fact that new
additions of containerboard and paperboard capacity tend to be large relative to the overall demand for the product. In addition, there
is the potential to convert certain other paper machines into containerboard machines, which may contribute to overcapacity.
Consequently, the industry has from time-to-time experienced periods of substantial overcapacity and there can be no assurance that
this will not reoccur. For example, we experienced market-related downtime at certain of our mills during the fourth quarter of fiscal
In the absence of sufficient economic growth to generate increased demand or the closure of facilities (either temporarily or
permanently) to mitigate the effect, new capacity can cause a period of regional overcapacity which may lead to downward pricing
pressure.
These adverse effects could be further exacerbated if producers in other regions (particularly China) experience overcapacity within
their own local and regional markets and seek to increase their levels of exports into those markets within which we operate and do so
at lower pricing levels. The effect of such activity would be to depress prices for our products and could materially adversely affect
our selling prices and profitability.
We believe that the trading price of our ordinary shares has from time to time been adversely affected in part due to the impact of
macroeconomic conditions on pricing and demand and announcements by certain of our competitors of planned additional capacity in
the European and North American containerboard markets in which we participate, as well as the subsequent implementation of
certain of those plans and the impact they will have on future supply and demand dynamics and pricing.
In addition, many of our customer contracts include price adjustment provisions based upon published indices (including those
published by Pulp and Paper Week (“PPW”)) for our products that contribute to the setting of selling prices for some of our products.
Such publications are limited surveys that may not accurately reflect changes in market conditions for our products. Changes in how
these indices are determined or maintained, or other indices are established or maintained, could adversely impact the selling prices for
these products. If published containerboard and paperboard index prices decline in a period, such changes will result in lower prices,
and likely lower profitability, for certain of our products, which could have an adverse effect on our results of operations, cash flows
and financial condition.
Our earnings are highly dependent on demand.
Because our operations generally have high fixed operating costs, and pricing movements can be triggered, at times, by imbalances
between supply and demand, our earnings are highly dependent on demand, which tends to fluctuate due to macroeconomic
conditions, dynamics in the markets we serve, and due to company- and customer-specific issues. For example, through 2024 and
2025, we experienced lower demand due to factors such as, but not limited to, uncertainty caused by challenging geopolitical and
macroeconomic conditions, certain customer inventory rebalancing and shifting consumer spending. These and other fluctuations
when they occur can lead to significant variability in our sales, results of operations and cash flow, making it difficult to predict our
financial results with certainty.
The extent of the impact of public health crises, including a pandemic, or related containment measures and government responses, are
highly uncertain and cannot be predicted, including as it relates to demand and volume for our products and could therefore adversely
affect our operational and financial performance.
Price fluctuations in, or shortages in the availability of, energy, transportation and raw materials could adversely affect our
business.
Our margins are affected by the prices that we are able to charge for our products and the costs of the raw materials we require to
make these products. Our primary raw materials are recovered fiber, particularly old corrugated containers (“OCC”), and wood fiber.
The prices for these raw materials tend to be volatile, and price fluctuations affect our margins.
OCC and wood fiber are used in the manufacture of our paper-based packaging products and are purchased in increasingly
competitive, price-sensitive markets. OCC prices are based on market prices that have historically exhibited price and demand
cyclicality and significant price volatility over short periods and may do so again in the future. In particular, the price of OCC depends
on a variety of factors over which we have no control, including demand from outside our countries of operation, environmental and
conservation regulations, natural disasters and weather. Despite owning our own recycling depots to independently source some of our
OCC supplies, from a price perspective, OCC prices are linked to official reference prices and are therefore based on market prices.
Historically, these market prices have exhibited significant price volatility.
Prices of wood fiber are also impacted by many of these factors. A decrease in the supply of such raw materials has caused, and any
such decrease in the future can be expected to cause, higher costs. In addition, the increase in demand for products manufactured, in
whole or in part, from OCC has in the past caused an occasional supply or demand imbalance in the market for OCC. It may also
cause a significant increase in the cost of wood fiber used in the manufacture of recycled containerboard and related products. Asian
purchasers have been in the OCC market for a number of years and have become material purchasers in the sector due to significant
ongoing expansion of their recycled containerboard mills capacity. The effect of this has been to create volatility with respect to the
price of OCC. Our raw material costs are likely to continue to fluctuate based upon supply and demand characteristics.
In response to growing pressure from increased environmental awareness and the need to comply with greenhouse gas emission
targets, a number of northern European governments have sought to encourage the use of wood for energy generation purposes
through the use of subsidies. These policies create a new source of demand for wood. This has the effect of increasing the price of
wood fiber and consequently the cost of our raw materials for the production of kraftliner. If this trend continues or grows, this could
lead to further raw material price increases and could have a material adverse effect on our margins.
Many of our customer contracts contain price adjustment clauses either allowing us to pass increased costs on to our customers or
adjust prices based on an index or other mechanism. However, not all of our agreements contain these clauses and these clauses may
not in all cases be effective to fully offset our increased costs. Where we are able to raise prices there is generally a three- to six-month
lag between the time our raw material prices increase and the time we realize increased pricing from our customers.
Certain of the Company’s paper mills are subject to regulation under regulatory programs that mandate reductions in greenhouse gas
emissions, including the EU Emissions Trading Scheme, Quebec’s Regulation respecting a cap-and-trade system for greenhouse gas
emission allowances, and, in the United States, the Washington Climate Commitment Act, whereby covered businesses are issued
emissions allowances based on an annual limit or “cap” on greenhouse gas emissions and are required to have a sufficient number of
allowances to cover their annual greenhouse gas emissions. If a business’ greenhouse gas emissions exceed its available allowances, it
may be required to make capital investments or other expenditures to reduce emissions, or it may be required to buy additional
allowances on the market, at government auctions, or from other program participants. Failure to have a sufficient number of
allowances available may subject a business to penalties. As part of an energy-intensive, trade-exposed sector, the Company’s paper
mills that are subject to existing cap-and-trade regulations are entitled to receive a certain number of greenhouse gas emission
allowances at no cost to ease the energy transition. There is a risk that we will not have enough free allowances to meet our
compliance requirements. If we are required to make investments to reduce our greenhouse gas emissions, such as switching fuels to
lower carbon alternatives, or purchase allowances, these costs may not be recoverable through higher prices for our products and could
negatively affect our operations, financial condition and cash flows. Failure to meet our greenhouse gas obligations could result in
fines, penalties and potential damage to our business reputation. We also face risks that more of the Company facilities could become
subject to cap-and-trade programs or similar greenhouse gas reduction mandates in the future and that these programs or mandates
could significantly increase our energy and other input costs in these jurisdictions. Our production processes are energy intensive. If
energy prices increase in the future, this would increase our production costs, which could consequently have a material adverse effect
on our profitability.
We distribute our products primarily by truck, rail and sea. The reduced availability of trucks, rail cars or cargo ships, including as a
result of labor shortages in the transportation industry, could adversely impact our ability to distribute our products in a timely or cost-
effective manner. Higher transportation costs could make our products less competitive compared to similar or alternative products
offered by competitors.
The failure to obtain raw materials, energy or transportation services at reasonable market prices (or the failure to pass on price
increases to customers) or a reduction in the availability of raw materials, energy or transportation services due to increased demand,
significant changes in climate or weather conditions or other factors could have a material adverse effect on our business, results of
operations, cash flows and financial condition, and the trading price of our ordinary shares.
We are exposed to significant competition in the paper and packaging industry, and if we are unable to compete effectively, our
results of operations, cash flows and financial condition, and the trading price of our ordinary shares, could be adversely affected.
We operate in a highly competitive and fragmented industry. The paper and packaging industry is characterized by a high level of
price competition, as well as other competitive factors including innovation, design, quality and service. To the extent that any of our
competitors are more successful with respect to any key competitive factor, our business, results of operations, cash flows and
financial condition, and the trading price of our ordinary shares could be materially adversely affected. Pricing pressure could arise
from, among other things, limited demand growth in the market in question, price reductions by competitors, growth in supply from
existing competitors, entry of new competitors into the markets in which we operate, the ability of competitors to capitalize on their
economies of scale and create excess product supply, the ability of competitors to operate or successfully relocate or open production
facilities in countries where production costs are lower than those in which we operate and the introduction by our competitors of new
products, technologies and equipment, including the use of artificial intelligence and machine learning solutions.
Our products also compete, to some extent, with various other packaging materials, including products made of plastics, wood and
various types of metal. Customer shifts away from paper packaging to packaging made from other materials could adversely affect our
results of operations, cash flows and financial condition, and the trading price of our ordinary shares.
Operating Risks
We may experience business disruptions that adversely affect our operations.
We depend on continuous operation of our facilities. The operations at our facilities have in the past and may in the future be
interrupted or impaired by various operating risks, including, but not limited to, risks associated with:
• catastrophic events, such as fires, floods, earthquakes, explosions, natural disasters, severe weather, including hurricanes,
tornadoes and droughts, and pandemics, or other health crises or similar occurrences;
• interruptions in the delivery of raw materials or other manufacturing inputs;
• failure of third-party service providers and/or business partners to fulfill their commitments and responsibilities in a timely
manner and in accordance with agreed upon terms;
• government regulations;
• prolonged power failures;
• unscheduled maintenance outages, including due to equipment breakdowns or failures;
• information system disruptions or failures due to any number of causes, including cyber incidents;
• violations of our permit requirements, revocation of permits, or permit modifications that impose additional or more stringent
obligations;
• releases of pollutants and hazardous substances to the environment;
• disruptions in transportation infrastructure, including roads, bridges, railroad tracks and tunnels;
• shortages of equipment or spare parts; and
• labor disputes, strikes and shortages.
Business disruptions have impaired, and may in the future impair, our production capabilities and adversely affect our results of
operations, cash flows and financial condition, and the trading price of our ordinary shares. For example, operations at several of our
facilities located in the south and southeastern U.S. have been interrupted in recent years by hurricanes and severe winter weather,
resulting in, among other things, lost mill production. In addition, the impact of any future public health crises, including a pandemic,
or other business disruptions, on our operational and financial performance in future periods will depend on future developments,
which are highly uncertain and cannot be predicted. Our production capabilities may be disrupted if we are unable to secure sufficient
supplies of raw materials or if significant portions of our workforce are unable to work effectively as a result of a business disruption.
We have contingency plans and insurance coverage, subject to applicable deductibles or retentions, policy limits and other conditions,
that we use to seek to mitigate the impact of business disruptions; however, we may not be successful with respect to those mitigation
efforts or any claim regarding insurance coverage and, if we are successful, any amounts paid pursuant to the insurance may not be
sufficient to cover all our costs and expenses.
Smurfit Westrock has 57 paper mills of differing capacities. If operations at any key mills (those which are more complex and/or have
higher capacity) were interrupted for any significant length of time, it could have a material adverse effect on our business, results of
operations , cash flows and financial condition, and the trading price of our ordinary shares.
We may fail to anticipate trends and develop or integrate new technologies that would enable us to offer products that respond to
changing customer preferences or to protect intellectual property related to our products and technologies.
Our success depends, in part, on our ability to offer differentiated solutions, and we must continually develop and introduce new
products and services to keep pace with technological and regulatory developments and changing customer preferences. The services
and products that we offer customers may not meet their needs as their business models evolve. Also, our customers may decide to
decrease their use of our products, use alternative materials for their product packaging or forego the packaging of certain products
entirely. Regulatory developments can also significantly alter the market for our products. For example, a move to electronic
distribution of disclaimers and other paperless regimes could adversely impact our healthcare inserts and labels businesses. Similarly,
certain states and local governments have adopted laws banning single-use paper bags or charging businesses or customers fees to use
paper bags. Certain jurisdictions in which we conduct business have enacted extended producer responsibility legislation that requires
producers to assume financial accountability for the complete lifecycle of products, including associated fees on packaging. These and
similar developments could adversely impact demand for certain of our products.
Customer preferences for products and packaging formats are constantly changing based on, among other factors, lifestyle changes,
buying habits, cost, convenience, and health and sustainability concerns and perceptions. Also, there is an increasing focus among
consumers to ensure that products delivered through e-commerce are packaged efficiently. In addition, customers are increasingly
interested in the carbon footprint of our products, and future packaging developments and trends may drive further substitution. Our
results of operations, cash flows and financial condition, and the trading price of our ordinary shares, could be adversely affected if we
fail to anticipate and address these and other trends, including by developing and offering products that respond to changing customer
preferences, or if there is any significant substitution away from paper-based packaging products.
In addition, creating or adopting new or complementary technologies and subsequently integrating them may be costly and difficult.
We have been involved in trialing new and evolving technology, but doing so may require significant investments of capital, and such
innovations are subject to long lead times and failure. Trialing such technology can take an extended period of time, with little to no
returns in the short or medium terms. We also utilize and intend to expand our use of automation, robotics and machine learning in
many of our products, including consumer-facing features, and we leverage generative artificial intelligence in our business processes.
While we believe the use of these emerging technologies can present significant benefits, they also create risks and challenges. Data
sourcing, technology, integration and process issues, bias in decision-making algorithms, concerns over intellectual property,
reputational implications if use becomes controversial, system security concerns, or the protection of privacy could impair the
adoption and acceptance of autonomous machine solutions. Additionally, if we are unable to match or surpass the advances of
artificial intelligence that our competitors implement for their products or for internal operations, our competitive position could be
impacted. Any such risks could have a material adverse effect on our business, results of operations , cash flows and financial
condition, and the trading price of our ordinary shares.
Our success also depends, in part, upon our ability to obtain and maintain protection for certain proprietary packaging products and
packaging machine technologies used to produce our products. Failure to protect our existing intellectual property may result in the
loss of valuable legal rights. Our competitors may obtain intellectual property rights that could require us to license those rights or to
modify or cease the use or sale of certain of our technologies or products. Our patents could be invalidated, rendered unenforceable,
circumvented, challenged or licensed to others, and our pending or future patent applications may not be issued with the scope of the
claims we seek, if at all. Further, other companies may develop technologies that are similar or superior to our technologies, duplicate
our technologies or design around our patents, and steps we take to protect our technologies may not prevent misappropriation of those
technologies.
Our capital expenditures may not achieve the desired outcomes or may be completed at a higher cost than anticipated.
We operate in a capital-intensive industry and undertake expansion projects to either support growth in our business or improve the
breadth and quality of our product offerings, including investments in both mill and converting operations. Many of our capital
projects are complex, costly and/or implemented over an extended period of time. Our expenditures for capital projects could be
higher than anticipated, we may experience unanticipated business disruptions or delays in completing the projects and/or we may not
achieve the desired benefits from those projects, including as a result of a deterioration in macroeconomic conditions or in our
business, unavailability of capital equipment or related materials, delays in obtaining permits or other requisite approvals or changes in
laws and regulations. In addition, disputes between us and contractors who are involved with implementing capital projects could lead
to time-consuming and costly litigation. Any of these circumstances could adversely affect our results of operations, cash flows and
financial condition, and the trading price of our ordinary shares.
We are exposed to risks related to international sales and operations.
We operate in many different countries. As of December 31, 2025 , we had operations in 40 countries. As a result, we have previously
been and remain vulnerable to risks in these countries, including:
• the imposition of tariffs, quotas, import duties or other market barriers, (including the implementation of tariffs on U.S.
imports by the current U.S. Administration and potential retaliatory tariffs), such as restrictions on repatriating cash from
foreign countries;
• responding to disruptions in existing trade agreements or increased trade tensions between countries or political and
economic unions;
• the difficulties of, and costs of complying with, a wide variety of complex and changing laws, treaties and regulations;
• increased difficulty in the collection of accounts receivable, including longer collection periods;
• inconsistent regulations and unexpected changes in legislation or regulatory requirements and increased difficulty and
expense in hiring and dismissing employees;
• the imposition of quotas relating to the composition of the employee base or the local sourcing of raw materials or other
similar quotas;
• political, economic and social unrest or instability (such as downturns or changes in economic activity due to, among other
things, regional conflicts or commodity inflation), as well as disruptions and government intervention in national economies
and social structures, including the threat of terrorism;
• geopolitical conflict;
• work stoppages, transport interruptions and difficulties in managing international operations;
• government limitations on foreign ownership or takeovers, expropriation of private sector assets or mandated price controls;
• transfer pricing and adverse tax policies; and
• adverse currency fluctuations.
We are subject to taxation in the jurisdictions where we operate. We have several ongoing audit examinations and disputes that
generally cover multiple years with various tax authorities. We base our tax returns on our interpretation of tax laws and regulations in
effect; however, governing tax bodies have in the past and may in the future disagree with certain of our tax positions, which could
result in a higher tax liability. See “Note 21. Commitments and Contingencies ” of the Notes to the Consolidated Financial Statements
for discussion of an ongoing tax liability matter in Brazil.
The occurrence of any of the foregoing could have a material adverse effect on our earnings as a result of the related delays or
increased costs in the production and delivery of products and services or otherwise disrupt the demand for our products. Any of these
circumstances could adversely affect our results of operations, cash flows and financial condition, and the trading price of our ordinary
shares.
We could be exposed to currency exchange rate fluctuation risks.
We have operations in a number of countries. As such, currency movements can have a number of direct and indirect impacts on our
financial statements. Direct impacts include the translation of international operations’ local currency financial statements into U.S.
dollars and the remeasurement impact associated with non-functional currency financial assets and liabilities. Indirect impacts include
the change in competitiveness of imports into, and exports out of, the United States (and the impact on local currency pricing of
products that are traded internationally).
In addition, the relative strength or weakness of the U.S. dollar is important for the industry in which we operate because U.S.
containerboard and paperboard prices tend to influence the world market. A weak U.S. dollar over a sustained period has the potential
to result in lower imports into the United States of goods shipped in corrugated containers and, as a result, lower demand for our
containers from LATAM and Europe. A weak U.S. dollar could also result in additional competition in our European and Latin
American markets from other U.S. manufacturers that have an incentive to export more products due to increased demand for
relatively lower priced U.S. goods. Conversely, our U.S. operations could face additional competition from non-U.S. manufacturers if
a strong U.S. dollar was sustained over a long period. A strong U.S. dollar could also have the potential to reduce exports from the
United States of goods shipped in corrugated containers and, as a result, lower demand for our containers from the U.S.
We may produce faulty or contaminated products due to failures in quality control measures and systems, which could negatively
impact our business and share price.
We may fail to produce products that meet applicable safety and quality standards, which could result in adverse effects on consumer
health, litigation exposure, loss of market share and adverse reputational and financial impacts, among other potential consequences,
and we may incur substantial costs in taking appropriate corrective action (up to and including recalling products from end consumers
and reimbursing customers and/or end consumers for losses that they suffer as a result of these failures). Our failure to meet these
standards could lead to regulatory investigations, enforcement actions and/or prosecutions, and could result in adverse publicity, which
may damage our reputation. Any of these outcomes could have a material adverse effect on our business, results of operations , cash
flows and financial condition, and the trading of our ordinary shares.
We provide representations in certain of our contracts that our products are produced in accordance with customer specifications. If
the product contained in packaging manufactured by us is faulty or contaminated, the manufacturer of the product may allege that the
packaging we provided caused the fault or contamination, even if the packaging complies with contractual specifications. If our
packaging fails to meet contract specifications, we could face liability from our customers and third parties for bodily injury or other
damages. These liabilities could adversely affect our business, results of operations , cash flows and financial condition, and the trading
price of our ordinary shares.
We are subject to cybersecurity risks that could threaten the confidentiality, integrity and availability of data in our systems, and
could result in disruptions to our operations and adversely affect our operations, cash flows and financial condition.
Cybersecurity incidents could compromise our information technology or data and expose us to liability, which would cause our
business and reputation to suffer. We rely on various technologies, some of which are managed by third parties, to process, transmit
and store electronic information. In the ordinary course of our business, we collect and store sensitive data, including intellectual
property, our proprietary business information and that of our customers, suppliers and business partners, and personally identifiable
information of our customers and employees, in our information technology. We also collect and store limited, non-sensitive customer
personally identifiable information. The secure processing, maintenance and transmission of this information is critical to our
operations. The current cyber threat environment presents enhanced risk for all companies, including those in our industry. The rapid
evolution and increased availability of artificial intelligence may intensify cybersecurity risks by making targeted attacks more
convincing and cybersecurity incidents more difficult to detect, contain, and mitigate.
Despite our security measures, our information technology, and that of our third-party providers and business partners, is subject to
recurring attempts by threat actors to access information, manipulate data or disrupt operations. Information technology that we, third-
party providers and business partners use may be vulnerable to cyber-attacks or outages by common hackers, criminal groups, nation-
state organizations or social activist organizations (whose efforts may increase as a result of geopolitical events and political and social
unrest or instability around the world) due to insider threat, malfeasance or other disruptions, such as cyber-attacks, power outages,
telecommunication or utility failures, systems failures, service provider failures, natural disasters or other catastrophic events. The
significant increase in remote working and the continued expansion of the integrated supply chain increase the risks of cyber incidents
and the improper dissemination of personal or confidential information. Any such breach could compromise our information
technology and the information stored there could be accessed, publicly disclosed, lost or stolen, potentially resulting in legal claims or
proceedings and regulatory penalties. In addition, any such outage could disrupt or temporarily halt our operations resulting in reduced
productivity, staff downtime, and increased insurance premiums, as well as additional costs for attempting to recover lost information,
equipment or data, and could damage our reputation, which could have a material adverse effect on our business, results of operations ,
cash flows and financial condition, and the trading price of our ordinary shares.
We may also face challenges and risks during integration of acquired businesses and operations, as we and the acquired businesses and
operations may face increased targeted attempts during this busy period. While we maintain plans and processes to prevent or mitigate
the impact of these events, these events could nonetheless result in disruptions and damage. In addition, as a result of the foregoing,
we could experience adverse publicity, loss of sales, the cost of remedial measures, including substantial legal fees, and significant
expenditures to reimburse third parties for damages, each of which could adversely impact our results of operations. Any insurance we
maintain against the risk of this type of loss may not be sufficient to cover actual losses, may not apply to the circumstances relating to
any particular loss, or may become materially more costly over time. As a result, any or all of the above events could adversely affect
our operations, cash flows and financial condition, and the trading price of our ordinary shares.
We may be adversely impacted by work stoppages and other labor relations matters.
There are different labor unions represented across our sites and a majority of our employees are covered by a collective labor
agreement as a result of either local or national negotiations in the countries concerned. Labor disputes or other problems, such as
work stoppages, or failure to successfully renegotiate the terms of any of the collective labor agreements, could lead to a substantial
interruption to our business.
In addition, our business relies on vendors, suppliers and other third parties that have union employees. Any of the matters described
above, including work stoppages or other labor relations matters affecting us or these vendors, suppliers and other third parties, as well
as future developments in relation to our business or otherwise that adversely affect relations between us and our employees, could
adversely affect our results of operations, cash flows and financial condition, and the trading price of our ordinary shares.
We operate in a challenging market for talent and may not be able to attract, motivate and/or retain qualified personnel, including
our key personnel.
Our success depends on our ability to attract, motivate and retain employees with the skills necessary to understand and adapt to the
continuously developing needs of our customers. The increasing demand for qualified personnel makes it more difficult for us to
attract, motivate and retain employees with requisite skill sets, particularly employees with specialized technical and trade experience.
Changing demographics and labor work force trends also may result in a loss of knowledge and skills as more tenured and
experienced workers retire. If we are unable to attract, motivate and retain qualified personnel, or if we experience excessive turnover,
including among hourly workers, we may experience declining sales, manufacturing delays or other inefficiencies, increased
recruiting, training and relocation costs and other difficulties, and our results of operations, cash flows and financial condition, and the
trading price of our ordinary shares may be adversely impacted.
The market for both hourly workers and professional workers continued to be challenging in fiscal 2025, particularly in the U.S. The
labor environment for hourly workers remains competitive with continued instances of labor unrest, even as broader manufacturing
employment trends moderated from prior peaks. In certain locations where we operate, the demand for labor continues to exceed the
supply of labor, resulting in higher costs. Despite our focused efforts to attract, motivate and retain employees, we continue to focus
on the stabilization of attrition rates within our workforce. We also incurred higher operating costs at certain of our facilities in the
form of higher levels of overtime pay due to shift requirements and staffing challenges.
In addition, many professional workers desire a fully remote work setting. We offer flexible working arrangements in the majority of
instances; however, we may experience higher levels of attrition within our professional workforce if these workers desire more
remote work opportunities than we are able to offer. We may also experience higher levels of attrition if employees do not perceive
the purpose and impact of their work to be rewarding or their work-life balance to be satisfactory.
We also rely on key executive and management personnel to manage our business efficiently and effectively. The loss of these
employees, combined with a challenging market for attracting and retaining employees, could adversely affect our results of
operations, cash flows and financial condition, and the trading price of our ordinary shares may also be adversely impacted.
We face challenges associated with sustainability matters, including the impact of climate change and its potential impact on areas
such as our operations and raw material availability, which could have a significant impact on our reputation, business, results of
operations, cash flows and financial condition, and the trading price of our ordinary shares.
We have identified multiple ways in which climate change could impact our business operations, including through extreme weather
events. Our physical assets and infrastructure, including our manufacturing operations, are subject to risks from volatile and damaging
weather events. For example, severe weather, such as hurricanes, tornadoes, other extreme storms, wildfires, and floods, have resulted
in and/or could in future periods result in lost production and/or physical damage to our facilities. Unpredictable weather patterns or
extended periods of severe weather may also result in supply chain disruptions and increased material costs. In addition, one of our
key raw materials is virgin wood fiber, the availability of which is dependent on access to and the maintenance of healthy forests,
which could be impacted by adverse weather conditions, including drought, flooding and local restrictions on water usage. Moreover,
the ability to harvest the virgin wood fiber used in our manufacturing operations may be limited, and prices for this raw material may
fluctuate, during prolonged periods of heavy rain or drought or during tree disease or insect epidemics or other environmental
conditions that may be caused by variations in climate conditions. Other climate-related business risks that we face include risks
related to the transition to a lower-carbon economy, such as increased prices for certain fuels, including natural gas; the introduction of
a carbon tax or government mandates to reduce greenhouse gas emissions; and more stringent and/or complex environmental and
other legal requirements. To the extent that severe weather or other climate-related risks materialize, and we are unprepared for them,
we may incur unexpected costs, which could adversely affect our results of operations, cash flows and financial condition, and the
trading price of our ordinary shares.
The paper manufacturing industry in which we operate is energy intensive, and government initiatives, such as the European Union
Green Deal, the European Union’s initiative to reach net zero emissions of greenhouse gases by 2050, could increase government
regulation of greenhouse gas emissions, putting further limits on our paper manufacturing operations. In addition, if efforts aimed at
transitioning to a lower carbon economy result in a transition towards the use of materials that are more suitable for reusable
packaging, demand for paper packaging may decline, while demand for alternative packaging types may increase, which could
adversely affect our results of operations, cash flows and financial condition, and the trading price of our ordinary shares.
Increased focus and activism related to sustainability matters may hinder our access to capital, as investors may reconsider their capital
investment as a result of their assessment of our sustainability practices. Customers, investors, regulators and other stakeholders are
focused on sustainability issues, including those with respect to climate change, circular economy, packaging waste, sustainable
supply chain practices, deforestation, biodiversity, land, energy and water use, diversity, equity, inclusion and belonging and other
human capital matters. This focus may result in more prescriptive reporting requirements with respect to these topics, an increased
expectation that such topics will be voluntarily disclosed by companies such as ours, and increased pressure to make commitments, set
or revise targets and take action to meet them. Concern over climate change or the use and composition of packaging materials may
also result in new or increased legal and regulatory requirements to reduce or mitigate impacts to the environment. These demands,
regulatory requirements, and related perceptions and preferences could cause us to incur additional costs or to make changes to our
operations to comply with such, demands, requirements and customer preferences, and a delay in our response (or the failure to
respond effectively) may lead to material adverse effects on our business, results of operations , cash flows and financial condition, and
the trading price of our ordinary shares. See also “ We are subject to a growing number of environmental laws and regulations, and the
cost of compliance or the failure to comply with, and any liabilities under, current and future laws and regulations may negatively
affect our business .” Further, there can be no assurance that environmental activist groups and similar organizations will not mount
campaigns against us. On the other hand, our sustainability efforts may not be favored by certain stakeholders, whose priorities and
expectations may not align or may be opposed to one another and/or those of the Company, and there can be no assurance that our
sustainability efforts will be perceived positively, including the perception that they are not sufficiently robust, or conversely, too
costly, or not otherwise in the best interests of the Company and our shareholders, and, as a result, our investor, customer and other
stakeholder relationships could be damaged or this could lead to public scrutiny or reputational damage, which could adversely impact
our reputation, business and results of operations.
Both legacy Smurfit Kappa and WestRock previously established and publicly disclosed sustainability targets which are important to
many stakeholders, including certain investors and customers. New targets for Smurfit Westrock are expected to be published in the
second quarter of 2026 in the 2025 sustainability report. We expect to report performance relative to any such targets on an annual
basis. Failure to meet any such targets could result in negative publicity and reputational damage and could have a material adverse
effect on our business, reputation, results of operations , cash flows and financial condition, and the trading price of our ordinary
shares. If any such targets or commitments are not achieved on their projected timelines or at all, or if they are perceived negatively,
including the perception that they are not sufficiently robust or, conversely, are too costly, this would impact our reputation as well as
our relationships with investors, customers and other stakeholders. Moreover, any failure to act responsibly with respect to
sustainability issues or to effectively respond to new, or changes in, legal or regulatory requirements concerning environmental or
other sustainability matters, or increased operating or manufacturing costs due to increased regulation could have a material adverse
effect on our business, reputation, operating results, financial condition and the trading price of our ordinary shares. In addition, we
may also be adversely impacted as a result of conduct by contractors, customers or suppliers that fail to meet our or our stakeholders’
sustainability standards.
Any of these risks could adversely affect our results of operations, cash flows and financial condition, and the trading price of our
ordinary shares.
Failure by us to successfully implement strategic transformation initiatives, including those relating to information technology
infrastructure, or to achieve our mid-range or long-range targets and goals could adversely affect our business and share price.
Smurfit Kappa and WestRock have throughout the years undertaken various projects relating to information technology infrastructure.
As part of integration initiatives, the Company is reviewing and evaluating its various business systems and the system strategies and
alternatives for Smurfit Westrock. The implementation of changes in business systems could represent a significant financial
undertaking and may require substantial time and attention of management and key employees. We may not be able to successfully
implement these initiatives without delays or may experience unanticipated business disruptions and/or we may not achieve the
desired benefits from such changes. Project completion dates may also change. Any of these items, along with any failure to
effectively manage data governance risks during implementation of these initiatives, could adversely affect our results of operations,
cash flows and financial condition, and the trading price of our ordinary shares.
We continue to implement and have in the past developed and endeavored to implement a number of operating plans designed to
enhance our business. For example, during February 2026, we announced our medium-term plan (“Medium-Term Plan”) targeting an
accelerated path to growth. The anticipated benefits described in the Medium-Term Plan are based on assumptions that may prove to
be inaccurate, and a variety of factors could cause us to fail to realize some or all of the expected benefits and targets outlined in the
plan. If, for any reason, the benefits we realize, or our actual results, are less than our goals or targets, or the implementation of related
growth initiatives, strategies (including our capital allocation strategy) and/or plans adversely affect our operations or cost more or
take longer to effectuate than we expect, or if our assumptions prove inaccurate, our results of operations, cash flows and financial
condition, and share price may be materially adversely affected .
If we are unsuccessful in integrating acquisitions or if disposals result in unexpected costs or liabilities, our business could be
materially and adversely affected.
We have completed a number of mergers, acquisitions, investments and divestitures in the past, including the Combination, and we
may seek to acquire, invest in, sell or enter into transactions with additional companies in the future. See also “ We face risks related to
the Combination ”.
We may not be able to identify suitable targets or purchasers or successfully complete suitable transactions in the future, and future
completed transactions may not be successful.
These transactions create risks, including, but not limited to, risks associated with:
• disrupting our ongoing business, including greater than expected costs and management time and effort involved in
identifying and completing the transactions and integrating acquisitions;
• integrating acquired businesses and personnel into our business, including integrating personnel, information technology
systems and operations across different cultures and languages, and addressing the operational risks associated with these
integration activities as well as the economic, political and regulatory risks associated with specific countries;
• working with partners or other ownership structures with shared decision-making authority;
• obtaining and verifying relevant information regarding a business prior to the consummation of the transaction, including the
identification and assessment of liabilities, claims or other circumstances that could result in litigation or regulatory risk
exposure;
• obtaining required regulatory approvals and/or financing on favorable terms;
• retaining key employees, contractual relationships or customers;
• the potential impairment of assets and goodwill;
• the additional operating losses and expenses of businesses we acquire or in which we invest;
• incurring substantial indebtedness to finance an acquisition or investment;
• incurring unexpected costs or liabilities in the context of a disposal; and
• implementing controls, procedures and policies in acquired companies.
These transactions may not be successful and may adversely affect our results of operations, cash flows and financial condition, and
the trading price of our ordinary shares. Among the benefits we expect from potential, as well as completed, acquisitions and joint
ventures are synergies, cost savings, growth opportunities or access to new markets (or a combination thereof), and in the case of
divestitures, the realization of proceeds from the sale of businesses and assets to purchasers that place higher strategic value on these
businesses and assets than we do. For acquisitions, our success in realizing these benefits and the timing of realizing them depend on
the successful integration of the acquired businesses and operations with our business and operations. Even if we integrate these
businesses and operations successfully, we may not realize the full benefits we expected within the anticipated time frame, or at all,
and the benefits may be offset by unanticipated costs or delays.
We face risks related to the Combination.
We closed the Combination between Smurfit Kappa and WestRock on July 5, 2024. Following the Combination, we targeted annual
pre-tax run-rate synergies of $400 million by the end of 2025, which we achieved, owing to integration benefits, procurement leverage
and administrative and overhead rationalization. Furthermore, as we implement commercial practices and improve our operating
efficiency through the Combination, we expect to deliver further improvements in our results. However, these further improvements
are not certain, and may not be realized fully or at all, may take longer to realize or the costs of achieving the benefits and run-rate
synergies may be more than expected. Any such risks may result in our operating costs being greater than anticipated and may reduce
the net benefits of the Combination.
For instance, we have already incurred significant costs and expect to incur additional costs in connection with integrating the
operations of legacy Smurfit Kappa and legacy WestRock. Furthermore, there can be no assurance tha t we will continue to
successfully integrate the two businesses. It is possible that the integration process could result in the loss of key Smurfit Kappa or
WestRock employees, the loss of customers, the disruption of either or both companies’ ongoing businesses, unexpected integration
issues, higher than expected integration costs or an overall integration process that takes longer than originally anticipated. We may
face challenges in the continued integration of the operations of Smurfit Kappa and WestRock, including without limitation:
• ongoing combination of the companies’ operations and corporate functions;
• further integrating and unifying the offerings and services available to customers;
• further identifying and eliminating redundant and underperforming functions and assets;
• reaching the potential from cross-selling corrugated and consumer-packaging products;
• further harmonizing the companies’ operating practices, internal controls and other policies, procedures and processes;
• maintaining existing agreements with customers and suppliers and avoiding delays in entering into new agreements with
prospective customers and suppliers; and
• further coordinating distribution and marketing efforts across geographically dispersed organizations;
The integration may also result in additional and unforeseen expenses, and the anticipated benefits of the integration plan may not be
realized on a timely basis. As such, any of the above factors may impair our ability to realize the anticipated benefits of the
Combination and could adversely affect our results of operations, cash flows and financial condition, and the trading price of our
ordinary shares. We may not realize all of the benefits of the Combination or such benefits may take longer than anticipated or may be
lower than estimated.
Financial Risks
Our continued growth depends on our ability to retain existing customers and attract new customers.
The future growth of our business depends on our ability to retain existing customers, attract new customers as well as securing
increased purchase volumes from such existing customers and new customers. There is no assurance that customers will continue to
use our services or that we will be able to continue to attract new volumes at the same rate as we have in the past.
A customer’s use of our services may decrease for a variety of reasons, including a decrease in the customer’s own sales and volumes,
the customer’s level of satisfaction with our products and services, the expansion of business to offer new products and services, the
effectiveness of our support services, the pricing of our products and services, the pricing, range and quality of competing products or
services, the effects of global economic conditions, regulatory limitations, trust, perception and interest in the paper and packaging
industry and in our products and services. Furthermore, the complexity and costs associated with switching to a competitor may not be
significant enough to prevent a customer from switching packaging providers.
Failure by us to retain existing customers, attract new customers, and increase revenue from both new and existing customers could
have a material adverse effect on our business, results of operations, cash flows and financial condition, and the trading price of our
ordinary shares. The effort to retain customers and attract new customers may require price concessions, financial expenditures,
commitments of resources, developments of processes, and other investments and innovations.
A number of the industries in which our customers operate have experienced consolidation in the past and may continue to do so in the
future. Such consolidation may affect our relations with our customers. In the past, when one of our customers has combined with
another, we have on occasion lost business and there can be no assurance that this will not occur again in the future. Additionally, the
ability of customers to exert pricing pressure on all suppliers, including us, has increased as their industries have consolidated and the
customers have become larger. However, our level of customer concentration may increase in the future. Such consolidation could
have a material adverse impact on our business, results of operations, cash flows and financial condition, and the trading price of our
ordinary shares.
Our debt could adversely affect our financial health and operating flexibility.
As of December 31, 2025 , our total debt was $13.8 billion . Our levels of debt could restrict our operating and financial flexibility,
including:
• requiring us to dedicate a large portion of our cash flow from operations to service debt and fund repayments on our debt,
thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate
purposes;
• increasing our vulnerability to general adverse economic, industry or competitive conditions;
• limiting our flexibility in planning for, or reacting to, changes in our business or the industry in which we operate;
• impede access to or increase the cost of additional debt or equity capital in the future;
• restricting us from making strategic acquisitions or exploiting business opportunities; and
• placing us at a competitive disadvantage compared to our competitors that have less debt.
Any of these outcomes may adversely affect our results of operations, cash flows and financial condition, and the trading price of our
ordinary shares. To the extent that we incur additional debt or such other obligations, the risk associated with our debt described above
may increase.
In addition, a portion of our debt bears interest at variable rates that are linked to changing market interest rates. Our exposure to rising
interest rates subjects us to increased debt service obligations, both with respect to existing floating rate indebtedness and the
incurrence of additional fixed or floating indebtedness during periods where such rates are in effect. Although we may hedge a portion
of our exposure to variable interest rates by entering into interest rate swaps from time to time, we cannot provide assurances that we
will do so in the future. An increase in market interest rates would increase our interest expense on our variable rate debt obligations,
which may exacerbate the risks associated with our capital structure and adversely affect our results of operations, cash flows and
financial condition, and the trading price of our ordinary shares. Restrictions imposed by certain of our existing and future indentures
and credit facilities limit or may limit our ability to take certain actions.
Adverse credit and financial market events and conditions, as well as credit rating downgrades, could, among other things, imped e
access to or increase the cost of financing, which could have a material adverse impact on our business, results of operations, cash
flows and financial condition, and the trading price of our ordinary shares.
We rely on access to the credit and capital markets to finance our operations and refinance existing indebtedness. Any limitations on
our access to the credit and capital markets on satisfactory terms, or at all, could limit our liquidity, financial flexibility or cash flows
and affect our ability to execute our strategic plans, which could have a material adverse effect on our business, results of operations,
financial condition and the trading price of our ordinary shares.
Our access to the credit and capital markets is subject to a number of variables, including our results of operations, margins and
activity levels, the conditions of the global credit and capital markets, market perceptions of our creditworthiness and the ability and
willingness of lenders and investors to provide capital. In recent years, global financial markets have experienced disruptions and
general economic conditions have been volatile. During periods of financial market volatility, our access to the credit and capital
markets could be impaired, which could adversely affect our results of operations, cash flows and financial condition, and the trading
price of our ordinary shares.
In addition, the costs and availability of financing from the credit and capital markets depends on our credit ratings. Any rating,
outlook or watch assigned to such debt securities could be lowered or withdrawn entirely by a rating agency if, in that rating agency’s
judgment, current or future circumstances change relating to the basis of the rating, outlook or watch, such as adverse changes to the
Company’s business. Any failure to maintain investment grade credit ratings could adversely affect our future cost of funding,
liquidity or access to capital markets, which could adversely affect our results of operations, cash flows and financial condition, and
the trading price of our ordinary shares.
We have a significant amount of goodwill and other intangible assets and a write-down could materially adversely impact our
operating results.
As of December 31, 2025 , we had goodwill and other intangible assets of $8.3 billion . In accordance with GAAP, we do not amortize
goodwill but rather test it annually and as otherwise required for impairment and any such impairments cannot be reversed. Similarly,
we review our other intangible assets for impairment when circumstances indicate that the carrying value may not be recoverable. The
impairment analysis requires us to analyze a number of factors and make estimates that require significant judgment. In the event that
general trading conditions and prospects deteriorate or factors underlying assumed discount rates, such as assumed long-term interest
rates, change, the determined recoverable amount of certain other intangible assets and goodwill may fall below carrying value. We
have recorded impairments in previous years. Additional impairments may occur in the future, which could adversely affect our results
of operations, cash flows and financial condition, and the trading price of our ordinary shares.
We have a number of pension arrangements that are currently in deficit and may require increased funding due to statutory
requirements .
We operate a number of pension and other long-term benefit plans throughout the world, devised in accordance with local conditions
and practice. Currently, a significant but declining proportion of our employees are members of defined benefit pension arrangements,
most of which are now closed to new entrants and future benefit accrual. The deficit of thes e employee benefit plans was $30 million
as of December 31, 2025 .
An increase in the value of the liabilities or decrease in the value of pension plan assets may negatively affect our balance sheet and
distributable reserves, any of which could have a material adverse effect on our business, results of operations, financial condition and
the trading price of our ordinary shares. The liabilities will mainly be affected by increases in life expectancy and by changes in long-
term yields, which are used to discount the liabilities to present value. The assets will be affected by increases in long-term yields,
which will reduce the value of bond investments, and by movements in equity markets. These factors create a considerable degree of
volatility in the measurement of any pension scheme’s deficit or surplus.
There is a risk that equity and bond markets will deteriorate if the global economic climate worsens, which could negatively affect the
funded status of our post-employment defined benefit arrangements. In addition, volatility in our net balance sheet liabilities resulting
from the relative change in the value of assets and liabilities may be further enhanced by investment strategies resulting in exposure to
various classes of assets.
Existing and potential changes in statutory minimum requirements may also affect the amount and timing of funding to be paid by us.
Most funding requirements consider yields on assets such as government bonds or interbank interest rate swap curves, depending on
the basis. Although recent statutory easements in the pace of funding on these bases and increases in bond/swap yields have provided
some contribution relief to us, we may nonetheless have to pay additional contributions to meet potentially onerous statutory minimum
funding requirements in the future, which could have a material adverse effect on our business, results of operations, financial
condition and the trading price of our ordinary shares.
Our decision or ability to pay dividends in respect of our shares or conduct share repurchases is subject to a number of factors,
including the distributions of earnings to the Company by its subsidiaries, the financial condition and results of operations of the
Company, as well as the distributable reserves of the Company at the discretion of the Company’s Board, and there are no
guarantees that the Company will pay dividends or will maintain or increase the level of any such dividends or that the Company
will conduct share repurchases.
Any determination to pay dividends to our shareholders is at the discretion of the Company’s Board and will be dependent on then-
existing conditions, including, but not limited to, our results of operations, capital investment priorities, the market price of our shares
and access to capital markets, legal requirements, industry practice, the distribution of earnings to the Company by its subsidiaries, the
financial condition, limitations under Irish law and other factors the Company deems relevant. While Smurfit Westrock has
historically paid dividends, including progressive dividends there can be no assurance that our shareholders will receive or be entitled
to dividends that are equivalent to the historical dividends, and there is no assurance as to the timing or level of future dividend
payments, if any, because these depend on, among other considerations, future earnings, capital requirements and financial condition,
legal requirements, covenant compliance, restrictions in our existing and any future debt agreements and other factors that our Board
deems relevant.
In addition, from time to time our Board may authorize share repurchase programs. The amount and timing of share repurchases are
subject to capital availability and our determination that share repurchases are in the best interest of our shareholders and are in
compliance with all respective laws and our applicable agreements. Our ability to repurchase shares will be subject to applicable
Board approval and authorization and management discretion and will depend upon, among other factors, our cash balances and
potential future requirements for strategic transactions, our results of operations, our financial condition, price and economic and
market conditions and other factors beyond our control that we may deem relevant. We can provide no assurance that we will
repurchase shares at favorable prices, if at all. We are not obligated to make any purchases and may discontinue any program at any
time.
We cannot guarantee that any share repurchase program or dividend program will be continuously active or fully consummated since
it can be discontinued, suspended or delayed at any time, or will enhance long-term shareholder value, and share repurchases or
dividends could increase the volatility of our stock prices and could diminish our cash reserves .
Changes in existing financial accounting standards or practices may have a material adverse effect on our business, results of
operations, cash flows and financial condition, and the trading price of our ordinary shares.
Changes in existing accounting rules or practices, new accounting pronouncements or rules or varying interpretations of current
accounting pronouncements could have a material adverse effect on our business, results of operations, cash flows financial condition,
and the trading price of our ordinary shares, or the manner in which we conduct our business. Further, such changes could potentially
affect our reporting of transactions completed before such changes are effective .
GAAP is subject to interpretation by the Financial Accounting Standards Board, the SEC and various bodies formed to promulgate
and interpret appropriate accounting principles. A change in these principles or interpretations could have a material adverse effect on
our business, results of operations, cash flows and financial condition, and the trading price of our ordinary shares, and could affect the
reporting of transactions completed before the announcement of a change.
Legal and Regulatory Risks
We are subject to a wide variety of laws, regulations and other requirements that may change or may impose substantial
compliance costs, and non-compliance with such laws and regulations may negatively affect our business.
We are subject to a wide variety of regional, national, state, provincial, and local laws, regulations and other requirements, including
those relating to the environment, product safety, competition, corruption, sanctions, occupational health and safety, labor and
employment, data privacy, artificial intelligence, tax and health care. These laws, regulations and other requirements may change or be
applied or interpreted in ways that will require us to modify our equipment and/or operations, subject us to enforcement risk, expose
us to reputational harm or require us to incur additional costs, including substantial compliance costs, which may adversely affect our
results of operations, cash flows and financial condition, and the trading price of our ordinary shares.
We operate in multiple countries, and each of these countries may have bribery and anti-corruption laws and regulations, including the
U.S. Foreign Corrupt Practices Act, the Sapin II Law in France, the Bribery Act in the United Kingdom and the Criminal Justice
(Corruption Offences) Act 2018 in Ireland, some of which are potentially extra-territorial in scope. Our internal control policies and
procedures, or those of our vendors, may not adequately protect us from reckless or criminal acts committed or alleged to have been
committed by our employees, agents or vendors. Any such non-compliance with bribery and anti-corruption legislation could lead to
civil or criminal, monetary and non-monetary penalties and/or could damage reputations.
The tax laws of Ireland and other jurisdictions in which we operate could change in the future, including through the enactment of
additional laws, the revision of existing laws, and/or developments in case law, regulations and policy changes. Any such changes
could cause a material change in our effective tax rate.
U ncertainty in the legal and regulatory regime relating to artificial intelligence may require significant resources to modify and
maintain business practices to comply with international laws and regulations, the nature of which cannot be determined at this time.
Several jurisdictions, including Europe, the U.S. federal government, and certain U.S. states, have already proposed or enacted laws,
regulations, and other requirements governing artificial intelligence. Other jurisdictions may decide to adopt similar or more restrictive
requirements. These requirements may make it harder for us to conduct our business using artificial intelligence, lead to regulatory
fines or penalties, require us to change our business practices, or require us to limit artificial intelligence usage, which may lead to
inefficiencies or competitive disadvantages .
We are subject to regulation by trade sanctions and related legislation, which have become an increasingly prevalent instrument of
foreign policy in recent years. Sanctions lists are generated by a wide variety of government agencies in countries where we do
business, and the individuals, entities and products on these lists are being modified with increasing frequency in recent years. Due to
our scale and footprint, we must monitor existing sanctions closely and exercise caution to avoid trading with any sanctioned country,
individual or organization. The penalties for non-compliance with sanctions regimes are severe; offenses for breach of sanctions
regimes can be both civil and criminal in nature. We could therefore be adversely affected by sanctions if we fail to closely monitor
compliance with sanctions regimes, which could adversely affect our results of operations, cash flows and financial condition, and the
trading price of our ordinary shares.
Furthermore, following the Combination, we are required to comply with securities laws and other laws and regulations applicable in
the U.S., the U.K. and Ireland, which resulted in considerable legal and financial compliance costs.
Ongoing and future compliance with existing and new laws and requirements has the potential to disrupt and/or burden our business
operations and may require significant expenditures, and our existing reserves for specific matters may not be adequate to cover future
costs. In particular, our manufacturing operations consume significant amounts of energy, and we may in the future incur additional or
increased capital, operating and other expenditures from changes due to new or increased climate-related and other environmental
requirements. We could also incur substantial liabilities, including fines or sanctions, enforcement actions, natural resource damages
claims, cleanup and closure costs, and third-party claims for property damage and personal injury under environmental and other laws.
Finally, the cost of compliance or the failure to comply with such laws and regulations could adversely affect our results of operations,
cash flows and financial condition, and the trading price of our ordinary shares.
We are subject to a growing number of environmental laws and regulations, and the cost of compliance or the failure to comply
with, and any liabilities under, current and future laws and regulations may negatively affect our business .
Environmental compliance requirements are a significant factor affecting our business. Our manufacturing processes involve the use
of natural resources, such as virgin wood fiber and fresh water, discharges to water, air emissions and waste handling and disposal
activities. These processes are subject to numerous international, national, regional, provincial, state and local environmental laws and
regulations, as well as the requirements of environmental permits and similar authorizations issued by various government authorities.
Complex and lengthy processes may be required to obtain and renew approvals, permits, and licenses for new, existing or modified
facilities. Additionally, the use and handling of various chemicals or hazardous materials require release prevention plans and
emergency protocols. We have incurred, and expect that we will continue to incur, significant capital, operating and other expenditures
complying with applicable environmental laws and regulations. Changes in environmental laws, as well as litigation relating to these
laws, could result in more stringent or additional environmental compliance obligations for the Company that may require additional
capital investments or increase our operating costs.
We are involved in various administrative and other proceedings relating to environmental matters that arise in the normal course of
business, and we may become involved in similar matters in the future. Although the ultimate outcome of these proceedings cannot be
predicted and we cannot at this time estimate any reasonably possible losses based on available information, we do not believe that the
currently expected outcome of any environmental proceedings and claims that are pending or threatened against us will have a
material adverse effect on our results of operations, financial condition or cash flows.
We also may incur significant expenditures in connection with the required remediation of environmental conditions at both currently
owned and formerly owned facilities, as well as in connection with various sites owned or operated by third parties. While we believe
that we can assert claims for indemnification of remediation expenses pursuant to rights we have under certain agreements in respect
of certain remediation sites and we have insurance coverage, subject to applicable deductibles or retentions, policy limits and other
conditions, for certain environmental matters, we may not be successful with respect to any claim regarding these insurance or
indemnification rights and, if we are successful, any amounts paid pursuant to the insurance or indemnification rights may not be
sufficient to cover all our costs and expenses. We also cannot predict whether we will be required to perform remediation projects at
other locations, and it is possible that our remediation requirements and costs could increase materially in the future and exceed
current reserves. In addition, we cannot currently determine the impact that future changes in cleanup standards or environmental
laws, regulations or enforcement practices will have on our results of operations, financial condition or cash flows. Any of these
circumstances could adversely affect our results of operations, cash flows and financial condition, and the trading price of our ordinary
shares.
Changes to trade policy, including tariff and customs regulations, or failure to comply with such regulations may have an adverse
effect on our reputation, business, financial condition and results of operations.
Changes or proposed changes in U.S. or other countries’ trade policies may result in restrictions and economic disincentives on
international trade. Tariffs, economic sanctions and other changes in U.S. trade policy have in the past and could in the future trigger
retaliatory actions by affected countries, and certain foreign governments have instituted or are considering imposing retaliatory
measures on certain U.S. goods. Further, any emerging protectionist or nationalist trends (whether regulatory or consumer-driven)
either in the U.S. or in other countries could affect the trade environment. We, like many other multinational corporations, conduct a
significant amount of business that would be impacted by changes to the trade policies of the U.S. and other countries (including
governmental action related to tariffs, international trade agreements, or economic sanctions). Such changes have the potential to
adversely impact the U.S. economy or certain sectors thereof or the economy of another country in which we conduct operations, our
industry and the global demand for our products, and as a result, could have a material adverse effect on our business, financial
condition and results of operations.
We are subject to compliance with antitrust and similar legislation in the jurisdictions in which we operate.
We are subject to legislation in many of the jurisdictions in which we operate relating to unfair competitive practices and similar
behavior. From time to time, we have been subject to allegations of such practices and regulatory investigations or proceedings with
respect thereto. For example, on July 29, 2025, we were named among the defendants in a class action lawsuit filed in the U.S. District
Court for the Northern District of Illinois alleging violations of U.S. antitrust laws. Such allegations, investigations or proceedings
(irrespective of merit) may require, and have required, us to devote significant management resources to defending ourselves. In the
event that such allegations are proven, we may be subject to fines, damages awards and other expenses, and our reputation may be
harmed, which could have a material adverse effect on our business, results of operations, cash flows and financial condition, and the
trading price of our ordinary shares.
For additional information, see “Note 21. Commitments and Contingencies ” of the Notes to Consolidated Financial Statements.
We are subject to a number of laws and regulations relating to privacy, security and data protection, and failure to comply with
such laws and regulations could adversely affect our business and our financial condition or lead to fines and/or litigation.
We are subject to a number of laws and regulations relating to privacy, security and data protection, including the General Data
Protection Regulation (EU 2016/679) (“GDPR”) and new and evolving privacy laws in the United States, Europe, Latin America, and
elsewhere. These laws and regulations have created individual privacy rights, imposed increased obligations on companies handling
personal data, and increased potential exposure to fines and penalties as a result of breaches of such privacy, security or data
protection laws. Additionally, new laws or regulations governing privacy, security, artificial intelligence and data protection may be
introduced which apply to us in any of the jurisdictions in which we operate. The nature and extent of any such new and/or amended
laws or regulations, and the impact they may have on us, cannot be predicted.
We rely on third-party service providers and our own employees and systems to collect and process personal data and to maintain our
databases, and as a result, we are exposed to the risk that such data could be wrongfully appropriated, lost or disclosed, or damaged or
processed in breach of such privacy, security or data protection laws. These events could result in disruptions and damage, or the
misappropriation of sensitive data, and depending on their nature and scope, could lead to the compromise of confidential information,
improper use of our systems and networks, manipulation and destruction of data, defective products, production downtimes,
operational disruptions and exposure to liability. Such disruptions or misappropriations and the resulting repercussions, including
reputational damage and legal claims or proceedings, may have a material adverse effect on our business, results of operations, cash
flows and financial condition, and the trading price of our ordinary shares. See also “ We are subject to cybersecurity risks that could
threaten the confidentiality, integrity and availability of data in our systems, and could result in disruptions to our operations and
adversely affect our operations, cash flows and financial condition .”
While we endeavor to comply with all applicable laws and regulations relating to privacy, security, artificial intelligence and data
protection, it is possible that such requirements may be interpreted and applied in a manner that is inconsistent from one jurisdiction to
another or may conflict with other laws or our practices. That concern is particularly relevant for the GDPR, as different EU member
state regulators may differ as to their interpretation of the GDPR and the approach they may take to breaches, enforcement, complaints
or the exercise of rights to access personal data by individuals. Any perceived or actual failure by us to protect confidential data,
personal data, any material non-compliance with privacy, security or data protection laws or regulations or any general IT system
failure may harm our reputation and credibility, adversely affect our revenues, reduce our ability to attract or retain customers, result
in litigation or other actions being brought against us and the imposition of significant fines and, as a result, could have a material
adverse effect on our business, results of operations, cash flows and financial condition, and the trading price of our ordinary shares.
Failure to comply with applicable occupational health and safety laws and regulations or maintain good health and safety and
employee well-being practices in our facilities may have a material adverse effect on our business.
We are subject to a broad range of laws and regulations relating to occupational health and safety, and our safety program includes
measures required for compliance. We have incurred, and will continue to incur, operating costs and capital expenditures to meet our
health and safety obligations, as well as to continually improve our safety systems.
In addition, our business involves the use of heavy equipment, machinery and chemicals and requires the performance of activities that
create safety exposures, including the performance of relatively difficult and specialized tasks. Safeguarding the health, safety and
overall well-being of our colleagues is a top concern, critical to attracting and retaining the best talent, and plays a pivotal role in
realizing our business and sustainability objectives. We implement our health and safety requirements through a safety management
system that includes best practice sharing and operational learning. We seek to reduce exposures and eliminate serious injuries and
fatalities through engagement, execution of targeted risk reduction measures, and implementation of systems that promote continuous
improvement. Despite such efforts, a serious incident affecting the health and safety of any of our employees could occur and disrupt
our operations. There is also a risk of significant fines and penalties or litigation if a health and safety incident occurs. Furthermore,
disruption of operations caused by a major incident could have a material adverse effect on our customer relationships, business,
results of operations, financial condition and the trading price of our ordinary shares. Additionally, portions of our operations are in
areas, including those with ongoing political or geopolitical uncertainty, which could pose security risks to our employees or
operations. See also “As a leading global manufacturing business, we have been, and may be in the future, adversely affected by
factors that are beyond our control, such as economic and financial market conditions, geopolitical conflicts and other social and
political unrest or change ” and “ We are exposed to risks related to international sales and operation s.”
The Company’s maintenance of two exchange listings may adversely affect liquidity in the market for our shares and result in
pricing differentials of our shares between the two exchanges .
Given trading in our shares on the NYSE and the London Stock Exchange (“ LSE”) takes place in different currencies (U.S. dollars on
the NYSE and pounds sterling on the LSE) and at different times (resulting from different time zones, different trading hours and
different trading days for the NYSE and the LSE), the trading prices of our shares on these two exchanges may at times differ due to
these and other factors. Any decrease in the price of our ordinary shares on the NYSE could cause a decrease in the trading price of
our ordinary shares on the LSE and vice versa.
We are required to comply with the Sarbanes-Oxley Act, and we may continue to incur significant costs and devote substantial
management time towards maintaining and improving our internal controls, which may materially adversely affect our operating
results in the future.
In addition to complying with securities laws and other laws and regulations applicable in the U.S., the U.K. and Ireland, we are
required to comply with the internal control, evaluation and certification requirements of Section 404 of the Sarbanes-Oxley Act of
2002 (the “Sarbanes-Oxley Act”), of which we have incurred and expect to continue to incur considerable legal and financial
compliance costs. Our management is responsible for establishing, maintaining and reporting on the Company’s internal controls over
financial reporting and disclosure controls and procedures to comply with applicable requirements, including the reporting
requirements of the Sarbanes-Oxley Act. These internal controls must be designed by management to achieve the objective of
providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes and in accordance with GAAP. We are continuing to improve and refine our disclosure controls and procedures and internal
control over financial reporting to achieve this. Pursuant to Section 404(a) of the Sarbanes-Oxley Act, we are required to furnish a
report by management on the effectiveness of our internal control over financial reporting. Material weaknesses in our internal control
over financial reporting may be discovered in the future. If we are not able to comply with the requirements of Section 404, or if we or
our accounting firm further identifies deficiencies in our internal control over financial reporting that are deemed to be material
weaknesses, the market price of our ordinary shares could decline and we could be subject to lawsuits, sanctions or investigations by
regulatory authorities, which would require additional financial and management resources.
Risks Related to Our Incorporation in Ireland
We are incorporated in Ireland and Irish law differs from the laws in effect in the U.S. and might afford less protection to our
shareholders.
As an Irish company, we are governed by the Irish Companies Act. The Irish Companies Act differs in some significant, and possibly
material, respects from laws applicable to U.S. corporations and shareholders under various state corporation laws, including the
provisions relating to interested directors, mergers and acquisitions, takeovers, shareholder lawsuits and indemnification of directors.
Irish law differs from the laws in effect in the U.S., and our shareholders could have more difficulty protecting their interests than
shareholders of a corporation incorporated in a jurisdiction of the U.S. The U.S. currently does not have a treaty with Ireland providing
for the reciprocal recognition and enforcement of judgments in civil and commercial matters. As such, there is some uncertainty as to
whether the courts of Ireland would recognize or enforce judgments of U.S. courts obtained against us or our directors or officers
based on U.S. federal or state civil liability laws, including the civil liability provisions of the U.S. federal or state securities laws, or
hear actions against us or those persons based on those laws.
Under Irish law, the duties of directors and officers of a company are generally owed to the company only. Shareholders of Irish
companies do not generally have rights to take action against directors or officers of the company under Irish law and may only do so
in limited circumstances. Directors of an Irish company must, in exercising their powers and performing their duties, act with due care
and skill, honesty and in good faith with a view to the best interests of the company. Directors have a duty not to put themselves in a
position in which their duties to the company and their personal interests might conflict and also are under a duty to disclose any
personal interest in any contract or arrangement with the company or any of its subsidiaries. If a director or officer of an Irish company
is found to have breached his or her duties to that company, he or she could be held personally liable to the company in respect of that
breach of duty.
In addition, under Irish law, we must have authority from our shareholders to issue any shares, including shares that are part of the
Company’s authorized but unissued share capital. In addition, unless otherwise authorized by its shareholders, when an Irish company
issues shares for cash to new shareholders, it is required first to offer those shares on the same or more favorable terms to existing
shareholders on a pro-rata basis. If we are unable to obtain these authorizations from our shareholders or are otherwise limited by the
terms of our authorizations, our ability to issue shares under our equity compensation plans and, if applicable, to facilitate funding
acquisitions or otherwise raise capital could be adversely affected.
Any attempts to acquire the Company will be subject to the Irish Takeover Rules and subject to the supervisory jurisdiction of the
Irish Takeover Panel and the Board may be limited by the Irish Takeover Rules in its ability to defend an unsolicited takeover
attempt.
The Company is subject to the Irish Takeover Rules, which regulate the conduct of takeovers of, and certain other relevant
transactions affecting, Irish public limited companies listed on certain stock exchanges, including the NYSE and the LSE. The Irish
Takeover Rules are administered by the Irish Takeover Panel, which has supervisory jurisdiction over such transactions. Among other
matters, the Irish Takeover Rules operate to ensure that no offer is frustrated or unfairly prejudiced and, in situations involving
multiple bidders, that there is a level playing field.
The Company is subject to the Irish Takeover Rules, under which we are not permitted to take certain actions that might “frustrate” an
offer for our ordinary shares once we receive an offer, or have reason to believe an offer is or may be imminent, without the approval
of more than 50% of our shareholders entitled to vote at a general meeting of the Company’s shareholders or the consent of the Irish
Takeover Panel. This may limit the ability of the Company’s Board to take defensive actions even if it believes that such defensive
actions would be in the Company’s best interests or the best interests of our shareholders.
